A Strategic Sustainable Development (SSD) Approach for executing Vision 2050

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A Strategic Sustainable Development (SSD) Approach

for executing Vision 2050

Sara Flores Carreño, Tamar Harel, Carmelina Macario

School of Engineering

Blekinge Institute of Technology Karlskrona, Sweden

2011

Thesis submitted for completion of Master of Strategic Leadership towards Sustainability, Blekinge Institute of Technology, Karlskrona, Sweden.

Abstract:

All levels of society, individuals, businesses and governments, must be involved in order to reverse the unsustainable path that society is currently on. Though much has been written about what needs to be done, there is much less literature on how to do it. This study attempts to start filling this gap.

This paper is focused on the Vision 2050 report which acknowledges the role businesses have in moving society towards sustainability. The Vision 2050 report which was released by the World Business Council for Sustainable Development explores the current reality business is facing and the opportunities that are available for them to incorporate sustainability into the mainstream of their business. The study examines how businesses can begin to integrate sustainability into their company‘s operations and services, using the report for inspiration and the Framework for Strategic Sustainable Development as guidance. A suggested approach is presented in the form of an implementation guide, which can be used by business to help them navigate their organization, collaborate with others and to develop an action plan as they work to integrating sustainability into their operations

Keywords: Strategic sustainable development, Vision 2050, For-profit companies, Implementation guide, Collaborative innovation, System thinking.

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Statement of contribution

This research is the result of three minds and hearts coming together seven months prior with a shared desire to make an impact. A few avenues were explored until the Vision 2050 report found its way to us, and in it we saw an opportunity and potential. This thesis project is the result of a shared journey, through which we discovered how much the report has to offer.

Exploring Vision 2050 has been an extraordinary process, and we learned that a journey like this requires all kinds of strengths and that we all have different ways of complementing one another, bringing out the best in each of us.

Sara brought to this project her curiosity and passion, the initial spark came from her, and it has been her spirit which kept us going. The depths she went into when investigating things is mostly present in the introduction and discussion, along with the implementation guide. Her ability to see things different than others, is what took us to different places in the research, as well as her burning questions to anyone we talked with.

Carmelina was the one who made things happen without anyone asking, always a step ahead and always checking what else needed to be done.

Apart from her much appreciated baked goods, her balance was what kept the group centred and focused on what matters. Her talent to locate information has brought much to all sections of the report, so did her editing and writing skills which helped to put it all together.

Tamar was the team‘s project manager extraordinaire – she made sure our project and our thesis was a structured one. From being our liaison with our advisors to coordinating our outreach plan she made sure our process was a smooth one. A stickler for details you will see evidence of her meticulousness throughout the paper, including in the report‘s implementation guide but most notably in the report‘s Methods and Results section.

Though we are proud of our end product, we also acknowledge that it is the journey which matters and not necessarily the destination. Our lessons learned are both shared and individual and they will be taken with us wherever we go from here.

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Acknowledgements

We would like to thank the many people who helped make this project a reality.

First, we want to thank our families, without you we simply wouldn´t be here. We feel thankful for our friends around us that have been enriched our lives during these 10 months. You all are great!

Secondly, thank you to the people of Sweden. Your desire to provide an educational experience to the entire world, free of cost, is invaluable.

Thank you Karl-Henrik Robèrt and Doctor Göran Broman for giving birth to this marvellous MSLS programme. It is such a contribution to the world, so necessary.

To, Tamara Connell for making the MSLS 2011 happened is such a unique way, becoming a vital experience to develop ourselves and gain necessary personal skills to go through life with. Besides that, thank you for guiding us on our first steps towards this thesis journey.

Richard Blume, thank you for introducing us to the Vision 2050 report.

We want to specially thank our advisors Zaida Bárcena and Tobias Larsson.

They have been an excellent source of support, always keeping us on track, always being accurate and concise in their advice and bringing a wise perspective. You made our thesis journey an enjoyable and easy one.

To our external panel of experts who gave us invaluable advice before we launched our little project into the world. Your advice gave us guidance, helped us to learn from our mistakes and has made our work that much richer. Thank you to Bob Willard, Sarah Brooks, Geneva Claesson, Goran Carstedt and Karl-Henrik Robèrt.

This project could not have been possible without the individual company representatives and staff that participated in the creation of Vision 2050 and others. We were blown away by their openness and their willingness to help us with our research. Their enthusiasm is evidence of the support that Vision 2050 has. They are: Dr. Georg Baeuml, Gerard Bos , Joe Chmielewski, Ged Davis , Juan Gonzalez-Valero, Bernhard Grünauer , Bob

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Horn, Nijma Khan Li Li Leong, Ian Korman, Katherine Madden, Kevin McKnight, David Moore, Andrew Ritch, Dr. Dorothea Seebode, Gary Sharkey, Hitesh Sharma, Rainy Shorey, Lise Sylvain, Michael Tost, Peter White, Olivier Vilaca and Kumar Venkatesh. A special thank you goes out to Per Sandberg who led the Vision 2050 process and was so giving of his time and experience.

Finally to our classmates, and in particular our shadow group and opponents whose questions and comments gave us new perspectives and strengthened our research.

Words are not enough...

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Executive summary

Background and Research Questions

While quality of life has improved thanks to the Industrial Revolution it has also put a strain on our ecological system thanks to the goods we ever increasingly consume that are produced because of it. If society continues with the same unsustainable trend, our relationship with nature can only get worse if we think that the global population is estimated to reach more than 9 billion people by 2050.

Our current situation is asking for a redesign of our values and priorities, and new measurements of success. We need to shift to a new and shared concept of prosperity: a concept based on fairness and happiness within the limits of a finite planet. Our economic system has a major role to play in this redesign. Vision 2050, a report released by the World Business Council for Sustainable Development in February 2010 understands that. The report, whose authors include some of the world's biggest companies was written by business in an effort to recognize the role businesses have to play in moving society towards a sustainable future. The report provides a vision of what a sustainable world could look like by 2050, one where ‗In 2050 around 9 billion people live well, and within the limits of the planet‘. It also provides a pathway, divided into 9 elements (People‘s Values, Human Development, Economy, Agriculture, Forests, Energy and Power, Buildings, Mobility and Materials). Each element has a list of actions to be completed before 2020 in order to attain the vision. As highlighted in the report, its biggest unanswered question is ‗How do we get there?‖.

Our research aims to analyze how a Strategic Sustainable Development (SSD) approach can be integrated into an Implementation Guide in an effort to help companies move towards the achievement of Vision 2050 goals in a strategic manner, with the ultimate goal of creating a sustainable society.

This study explores this by asking the following main research question:

How can multinational for-profit companies implement a Strategic Sustainable Development (SSD) approach to integrate Vision 2050´s goals into their plans and operations?

With the following supporting secondary research questions:

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1. What does the Framework for Strategic Sustainable Development (FSSD) reveal about Vision 2050´s approach in moving towards sustainability?

2. What are the barriers and enablers multinational for-profit companies face in executing Vision 2050 when moving towards sustainability?

3. How can a Strategic Sustainable Development (SSD) approach be used to develop an implementation guide to complement Vision 2050?

Methods

Joseph Maxwell‘s Interactive Model for Qualitative Research served as the template for defining the research components and how they interact, while still maintaining a flexible platform which allows constantly questioning and revising the process.

The research design was composed of five phases; Phase I of our research comprised of an analysis of the Vision 2050 report, using the FSSD as an analysis tool. This analysis provided the answers to the first secondary question. Phase II consisted of surveys and interviews to provide the answers to the second and third secondary questions - the barriers and enablers companies are faced with when implementing full sustainability and what makes an implementation guide successful, which brought us into Phase III. The third phase focused on creating a prototype of the implementation guide based on previous knowledge, the results from the second phase, existing models and personal deduction. Our fourth phase centred on validating the prototype through feedback from participants of the second phase. The final phase consisted of the revision of the prototype based on the feedback from Phase IV.

Results

Phase I which was completed by asking a set of questions for each level of the Framework revealed the strengths and weaknesses of the Vision 2050 report. Through this analysis we found gaps to varying degrees at each of the Framework‘s five levels, and focused the research around adding to both the success and the strategic level. As a visioning document the report lacks strategic guidance for companies hoping to attain the vision

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prescribed in the report, for example a prioritization process that allows them to choose which actions are most suitable for the company to take both from a company ‗fit‘ standpoint. The lack of a definition of sustainability adds to this. Without a definition of sustainability a company cannot be sure if the actions they take will lead society towards sustainability.

Phase II revealed that the biggest barriers companies face in executing Vision 2050 are: Mindset, which are challenges that are rooted in assumptions and perceived barriers which prevent action from being taken and Uncertainty, challenges which stem from the unknown aspects of sustainability. The greatest enablers are: Innovation, in both planning and thinking, Collaboration through the formation of complex coalitions and collaborative innovation, Change of Mindset by creating new definitions and measures of success as well as true valuation of costs and Guidance towards setting goals and milestones.

This phase also revealed that successful implementation guides must contain both ‗soft and hard wiring‘: intangibles and tangibles most notably Vision, Holistic Engagement, Human Capital, Tools, Structure and Controls.

Phase III resulted in the creation of an implementation guide.

The guide was informed by our personal knowledge of and experience with the FSSD as well as the results we gathered through our interviews and surveys.

Phase IV produced feedback which was used to improve and revise the implementation guide. The main comments received ware that the guide was hard to follow due to its many different elements, and not comprehensive enough due to the fact that the connection to the Vision 2050 report was not stressed enough.

Phase V resulted in a finalized Implementation Guide which consists of six steps. A copy of the guide is presented in Appendix E.

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viii Discussion

The discussion portion of this report allowed us to explore the story which emerged from the research results. Here we provide our interpretations, acknowledge the strengths and limitation of the research as well as that of the final version of the Implementation Guide.

The FSSD analysis of the Vision 2050 report identified where our research could have an impact – by providing a definition for sustainability and integrating that within strategic guidelines to be given to companies.

It was fortuitous then that the results of our surveys and interviews produced the same findings – companies and external experts were calling for details, for guidelines to strengthen Vision 2050.

Based on our own experience with the FSSD and with our basic knowledge of existing models we created an Implementation Guide whose components were validated through the analyzed data.

We benefited from having access to 13 of 29 companies who participated in creating Vision 2050 and having that inform our work. However when looking at it from a global scale we spoke to just a handful of companies and more specifically to their sustainability representatives.

As a result we created an Implementation Guide that provides an overarching view of what a company should do when answering the question ―How do we start down this road?‖ broken down into six practical steps to follow..

Conclusion

We became familiar with the Vision 2050 report over the five months we spend with it and it has made its mark on us. It is a positive, forward- looking, opportunities oriented piece of work that has inspired our work and the final Implementation Guide.

Too often sustainability is seen as a cost and a barrier; reports like Vision 2050 are helping to change that. Sustainability is a strategic necessity and now is the best time to take advantage of it.

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We cannot deny that the road to sustainability will be a challenging one.

Our research has shown that mindset is the greatest barrier we face, but it is also the strongest agent of transformational change.

Vision 2050 has shown us that by tackling the sustainability challenges, opportunities await in the form of improving social and ecological health as well as economic.

We hope that having tried to provide a practical guide for companies that they will feel empowered by the message Vision 2050's promotes and pick up our guide. We hope our guide gives companies the information they need in order to recognize the opportunities sustainability brings with it and the value that long-term and systems thinking have to offer. If we can do that, help ensure that the report does not become just another theory on the shelf, then we have done our job.

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Glossary

Backcasting: Method in which future desired conditions are envisioned and steps are defined to attain those conditions, based on the current reality.

Biosphere: Envelope of the earth's air, water, and land encompassing the heights and depths at which living things exist. The biosphere is a closed and self-regulating system (apart from solar and cosmic radiation), sustained by grand-scale cycles of energy and materials—in particular, carbon, oxygen, nitrogen, certain minerals, and water.

Complex system: a system that is constituted of a relatively large number of parts that interact in complex ways to produce behaviour that is sometimes counterintuitive and unpredictable

Economic System: The structure of production, allocation of economic inputs, distribution of economic outputs, and consumption of goods and services in an economy. It is a set of institutions and their social relations.

Feedback loops: Trends which impact the changes which occur in a system. Positive feedback loops amplify a change and take the system away from equilibrium, whereas negative feedback loops tend to buffer changes and bring the system back to equilibrium.

Framework for Strategic Sustainable Development (FSSD): A planning model for solving complicated problems in complex systems with sustainability as the desired outcome.

Greenhouse effect: A process in which radiated heat from the sun which is absorbed by the Earth's crust is radiated back to earth by the atmosphere and the clouds.

Green House Gas (GHG): Gas that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the enhanced greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapour, carbon dioxide, methane, nitrous oxide, and ozone.

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Gross Domestic Product (GDP): Measure of economical output (goods and services) of a given area.

Holistic: Originates in the Greek word 'holism', meaning 'whole', and was described by Aristotle as follows "The whole is different from the sum of its parts". It implies that the parts in a system can only be understood once you understand the system they are in.

Human needs: The nine fundamental human needs as defined by Manfred Max-Neef are few, finite and classifiable to; subsistence, protection, affection, understanding, participation, leisure, creation, identity and freedom. They lack any hierarchy and they are constant through different times of history and for any human culture.

Lithosphere: Comprises the crust and the portion of the upper mantle on Earth that behaves elastically on time scales of thousands of years or greater.

Mindset: The set of ideas, assumptions and beliefs which are held by either an individual or a group of people, which pre-determined how they perceive the world and how they tend to act in a certain manner under certain circumstances.

Net Present Value (NPV): The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

Professional Services Firm: Companies that are contracted to offer tailored solutions to their clients in different areas and skills, such as law, accounting and business development.

Satisfiers: Means through which the fundamental human needs are meant to be fulfilled. Unlike the human needs, satisfiers vary and they differ through time and human cultures.

Socio-ecological system: The system made up of human society within the biosphere.

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Stretch goals: Big and ambitious targets, which can be achieved within 20- 30 years, challenging enough in order to push the company forward, yet realistic and reachable.

Sustainability Challenge: The growing demand for resources and ecosystem services, the declining capacity of the earth to provide those resources and services, stricter governmental laws and consumer pressure, and the social tensions resulting from abuses of power and inequality and our ability to respond to these challenges.

Sustainability Principles: Four principles for a sustainable socio- ecological system. Based on scientific laws and knowledge.

Systemic: System-wide, affecting a group or system such as a body, economy, market or society as a whole.

Systematically: Deviation from the natural state.

Trade-off: A situation in which one trait might be gained at the expense of losing another trait. This can happen in nature through adaption, however in some situations this may require a full comprehensive choice to be made between various options.

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Table of Contents

Statement of Contribution ... ii

Acknowledgements ... iii

Executive Summary ………....v

Glossary ...x

Table of Contents ... xiii

List of Figures and Tables ... xvii

1 Introduction ...1

1.1 Society and the Sustainability Challenge ...1

1.2 The Funnel Metaphor ...3

1.3 Strategic Sustainable Development towards Sustainability ...4

1.3.1 The sustainability principles ...5

1.3.2 Backcasting ...6

1.3.3 Framework for Strategic Sustainable Development ...6

1.4 The Economic System as a large contributor to the sustainability challenge ...8

1.5 The World Business Council for Sustainable Development and Vision 2050 ... 11

1.5.1 The World Business Council for Sustainable Development... 12

1.5.2 Vision 2050 ... 13

1.5.3 Implementing Vision 2050 ... 14

1.6 Research ... 14

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1.6.1 Conceptual Framework ... 14

1.6.2 Research Purpose ... 15

1.6.3 Scope and Limitations ... 16

1.6.4 Research Questions ... 16

2 Methods ... 17

2.1 Research Design ... 17

2.2 Research Methods ... 18

2.2.1 Phase I: FSSD Analysis ... 18

2.2.2. Phase II: Surveys and Interviews ... 20

2.2.3. Phase III: 'Vision 2050 Implementation Guide' Protoype ... 22

2.2.4 Phase IV: Feedback ... 22

2.2.5 Phase V: Revising 'Vision 2050 Implementation Guide' ……… 23

2.3 Expected Results ... 23

3 Results ... 25

3.1 Vision 2050 FSSD Analysis... 25

3.1.1 System ... 25

3.1.2 Success ... 27

3.1.3 Strategic ... 29

3.1.4 Actions ... 30

3.1.5 Tools... 31

3.2 Barriers and enablers ... 32

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3.2.1 Barriers summary ... 33

3.2.2 Enablers summary ... 36

3.3 Applying a SSD approach in an Implementation Guide ... 40

3.3.1 Implementation Guide Components ... 40

3.3.2 Implementation Guide Supporting Data ... 42

3.3.3 An Implementation Guide for Vision 2050 ... 45

3.4 Finalization and Recommendations ... 51

4 Discussion ... 52

4.1 FSSD Analysis ... 52

4.2 Barriers and Enablers expectations ... 53

4.2.1 Barriers Summary ... 53

4.2.2 Enablers Summary ... 54

4.3 Application of an SSD approach for an Implementation Guide for Vision 2050 ... 56

4.3.1 Laying the Foundation ... 56

4.3.2 Implementation Guide supporting data ... 57

4.3.3 An implementation guide for Vision 2050 ... 58

4.3.4 A road map for Vision 2050 ... 59

4.3.5 Tools strengths and weanesses ... 61

4.4 Main RQ: Integrating an SSD approach in multinational companies... 62

4.5 The Research ... 62

4.5.1 Research Strength and Limitations ... 62

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5 Conclusion ... 64

References ... 65

Appendix A: Guiding questions for FSSD analysis ... 72

Appendix B: Research Participants ... 73

Appendix C: Question Distrubtion ... 75

Appendix D: Survey Response ... 76

Appendix : Vision 2050 Implementation Guide ... 85

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List of Figures

Figure 1.1. The Funnel Paradigm ...4

Figure 1.2. Framework for Strategic Sustainable Development ...7

Figure 2.1. The interactive model for qualitative research ... 18

Figure 2.2. Research plan: Phases and Methods ... 19

Figure 3.1. The 6 steps of the Vision 2050 Implementation Guide... 51

List of Tables

Table 2.1. Exploratory interviews ... 20

Table 3.1. Research participants ... 34

Table 3.2. Co-relations between research questions and IG...54

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1 Introduction

1.1 Society and the sustainability challenge

A major turning point in human civilization was the 18th century Industrial Revolution. The new advances which were introduced led to redefining agriculture, manufacturing and transportation, and eventually lifestyles. Our socioeconomic system shifted gear into high speed development, and it has been constantly growing ever since.

Average income began to grow at such an unprecedented rate of 10-fold in the two centuries following 1800, eliminating malnutrition and hunger from a large part of the world population, enhancing living conditions and health care. During this same period, population grew 6-fold (Maddison 2003, 256–62).

Thanks to these improvements, we now have a life expectancy of around 80 years in OECD countries (Organization for Economic Co-operation and Development)1 versus 40 years before industrialization (United Nations 2007). We are able to heal and avoid illnesses which before were a common cause of death. Far beyond meeting basic needs, we can now enjoy very comfortable lifestyles, benefiting from all the brilliant advances around us, like for example ―pseudo magic‖ technological solutions.

This high standard of life that our society developed is fed by lots of goods, and these demand resources, to such an extent that humankind benefits from a multitude of resources and processes that are supplied by natural ecosystems; collectively, these benefits are known as ecosystem services2.

1 OECD: The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems in order to understand what drives economic, social and environmental change. Its mission is to promote policies that will improve the economic and social well-being of people around the world (OECD 2011a). Nowadays, there are 34 member countries from North and South America, Europe and the Asia - Pacific region. These are many of the world‘s most advanced countries but also emerging countries like Mexico, Chile and Turkey (OECD 2011 b).

2 Ecosystem services: Includes products like clean drinking water and processes such as the decomposition of wastes. While scientists and environmentalists have discussed ecosystem services for decades, these services were popularized and their definitions formalized by the United Nations 2004 Millennium Ecosystem Assessment (Millennium Ecosystem Assessment 2005)

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The way of living in OECD countries has become absolutely dependant on a continuous extraction of finite materials from the lithosphere to the biosphere, such as minerals, metals and fossil fuels. This goes along with a large output of industrial and household waste and emissions.

Another aspect of our relationship with nature is the massive exploitation of ecosystems by fishing, agriculture and forestry. Nowadays, modern society consumes ~50 % of the total net primary production of land, decreasing over time the fraction left to other species. 15 of the 24 ecosystems services evaluated by the Millennium Ecosystem Assessment3 have been degraded over the past half century (WBCSD 2010, 2-3).

These processes happen to such extent and speed that exceeds the capacity of natural cycles, i.e. decay processes carried out by fungi and carbon capture of plants, to reconstruct and maintain the ecosystem´s equilibrium, and ultimately in the overall system, the planet (Wackernagel et al. 1997, 13).

If society continues with the current trend, the relationship with nature can only deteriorate assuming that global population is estimated to reach more than 9 billion people by 2050, (current global population is 6.9 billion) and 98% of this growth will take place in the developing and emerging world (United Nations 2007). The population increase is expected to be shaped by the doubling urban population, the ageing population in the developed world, and most of the economic growth will occur in developing and emerging economies. Essentially, improved life standards of increasing population will result in rising resource consumption per capita (WBCSD 2010, 2-3).

―The story now is one of growth in populations and consumption (in most parts of the world) compounded by inertia stemming from inadequate governance and policy responses. The result is degradation of the environment and society‖ (WBCSD 2010, 2-3).

Society therefore will experience a need to further increase the consumption of natural resources which, as we have mentioned above, has

3 Millennium Ecosystems Assessment: International synthesis by over 1000 of the world's leading biological scientists that analyses the state of the Earth‘s ecosystems and provides summaries and guidelines for decision- makers. The report refers to natural systems as humanity's "life-support system", providing essential "ecosystem services" (Millennium Ecosystem Assessment 2005, 6).

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a dramatic effect on key ecosystems services, diminishing supplies of food, fresh water, wood fibre and fish (WBCSD 2010, 2-3).

All this could lead to a situation in which by 2050 we would need 2.3 planets to maintain our current standard of living (WBCSD 2010, Executive Summary).

Since the industrial revolution human civilization has been undermining the conditions on which it depends on to survive. As a consequence of this behaviour society is now faced with a serious situation, known as the sustainability challenge.

1.2 The Funnel Metaphor

Our socio-ecological system is a complex one, made up of many parts which interact with one another in different ways. Everything humans do has an effect on the system. These effects can interact in numerous complex ways that are hard to predict, leading to multiple consequences which may be unnoticeable for a long time before they suddenly hit and become uncontrollable. This in many cases results in the weakening of the very things we depend upon to survive. As an example humans are over- exploiting forests, wetlands, and other natural habitats at an alarming rate.

The sustainability challenge originates from the flaws in our societal design. This reality is compounded by the fact that society continues to act in a way that keeps adding to these effects further weakening the socio- ecological system at a systematic rate. The consequences of which could be dramatic, including extinction (Robert 2000, 244).

This situation can be illustrated by the Funnel Paradigm (Figure 1.1). The walls of the funnel represent both how the social system systematically depends and demands more and more natural resources on the one hand, while at the same time the resources available are diminishing and the environment is systematically being degraded (Robert 2000, 245).

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Figure 1.1. The funnel paradigm (Natural Step 2011)

Because society depends on the biosphere for vital services such as climate, water and food, the degradation of this system directly constrains people´s ability to live on the Earth.

The closing walls symbolize how the capacity of the socio-ecological system to support human civilization is declining. The very conditions for societal welfare are being undermined in a systematic way. As society moves further down the unsustainable path, the funnel walls narrow in, leaving less space to manoeuvre. Consequently the options available for solving the challenge become limited.

1.3 Strategic Sustainable Development towards Sustainability

Based on the funnel metaphor, society needs to move in a new direction in order to avoid hitting the funnel walls, which means reaching a point where the ecological damage is almost or completely irreversible. Development needs to happen in a sustainable manner. This new way for society to move forward has to encompass a strategic sustainable development (SSD) approach, which enables development that "meets the needs of the present without compromising the ability of future generations to meet their own needs."This definition was coined at the Brundtland Commission (World Commission on Environment and Development 1987, 24).

Given that both society and the environment are complex systems, it can become unclear and difficult to understand what sustainability means and

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how to approach it. This section is aimed at providing the reader with a foundational base on how to face obstacles when using an SSD approach.

First we will introduce the reader to the Sustainability Principles as a comprehensive definition of sustainability. We will then explain the idea of Backcasting, a planning method necessary to understand the next concept of a Framework for Strategic Sustainable Development (FSSD). The FSSD is introduced as a planning model which aids planning endeavours whose desired outcome is to reach sustainability.

1.3.1 Sustainability Principles

In addition to the Bruntdland Commission‘s definition, when the word 'sustainability' is used in this paper, it is a more precise definition formed by four basic principles.

The four sustainability principles (4SPs) were reached through scientific consensus, an effort led by Dr. Karl-Henrik Robèrt and Dr. John Holmberg in the early 1990‘s, and were developed in an effort to establish a shared understanding of what the system conditions for a sustainable society are, based on the laws of nature (Robert et al. 1997, 88). The three first principles are based on the three mechanisms that degrade our ecosystems and offer a frame for ecological sustainability. The fourth principle is included as it is societal use that influences the first three principles (Broman et al. 2000, 17).

The characteristics of the sustainability principles make them helpful and reliable for companies seeking to move towards sustainability. They are:

a)…based on a scientific agreed upon view of the world;

b)…necessary to achieve sustainability;

c)…sufficient to achieve sustainability;

d)…general enough to structure all of society´s activities that are relevant to sustainability;

e)…concrete enough to guide action and serve as directional aids in problem analysis and solutions, and

f)…non-overlapping, or mutually exclusive, in order to enable comprehension and structured analysis of the issues.

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6 The four sustainability principles are:

In a sustainable society, nature is not subject to systematically increasing Concentrations of substances extracted from the earth‘s crust Concentrations of substances produced by society

Degradation by physical means And in that society

People are not subject to conditions that systematically undermine their capacity to meet their own needs (Missimer et al 2010, 1109).

1.3.2 Backcasting

Backcasting is a planning method in which future desired conditions are envisioned and steps are defined to attain those conditions. This method is helpful when used to solve complex problems that require major change.

(Ny et al. 2006, 63)

As the sustainability challenge is a complex one which requires major change, we will be backcasting from the envisioned future of a society on track towards sustainability as defined by the sustainability principles.

1.3.3 Framework for Strategic Sustainable Development

The 4SPs and backcasting are the cornerstones for the Framework for Strategic Sustainable Development (FSSD), which informs the strategic approach of this research. The FSSD is a 5 Level model aimed at help planning for solving complicated problems in complex systems (see Figure 1.2), such is planning and decision making towards a sustainable society.

The FSSD could help guide sustainability efforts bringing in a holistic approach. Though this framework can be used by anyone, it is useful for companies seeking to plan for sustainability, a challenge that requires major change. (Robert et al. 2002, 197)

Figure 1.2: Framework for Strategic Sustainable Development The Systems level allows an organization to take a bird‘s eye view of itself within the system in which it operates in order to analyze and understand

Strategic

Systems Success Actions Tools

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the various parts that make up this system and the relationships between them. This is to look at the company within society in the biosphere; how each of the parts work, the rules by which they are governed; and how they interact with one another. It is with this understanding that we can define success.

The Success level defines the goal, the compliance with the systems conditions for socio-ecological sustainability, according to the sustainability principles (introduced in 1.2.1). It is by using these principles as guidelines to plan for sustainability that an organization can achieve success, as they provide a whole systems view of global sustainability.

Organizations should use these principles as the framework for creating a vision, defining success and articulating specific goals. The aim should be to eliminate the contribution to violations of the SP‘s from their activities.

The Strategic level provides guidelines on selecting and prioritizing the most suitable actions which will strategically move an organization towards becoming a more sustainable one. The essence of this level is to backcast from the organization´s definition of success within the constraints of the 4 SPs.

Basic guidelines for strategic prioritization of actions used in backcasting will include: (1) bringing society closer to sustainability, (2) avoiding blind alleys and (3) generating sufficient resources (e.g. economic, social/political, and ecological) for the continuation of the process. In addition to these, the company may have some other prioritization criteria to apply.

The Actions level includes all activities that have been prioritized during the strategic level that will help in moving the organization towards success, which includes global sustainability. Actions can be of many types, from energy efficiency programmes to community building activities within the organization.

The Tools level describes the various approaches which support the implementation of the prioritized actions, as well as confirm that in fact these actions are moving the organization towards success. This can be done in many ways, for example monitoring progress by using different indicators for success (Robert et al. 2002, 198-205).

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1.4 The Economic System as a large contributor to the sustainability challenge

"There is no business on a dead planet", David Brower, conservationist.

The economic system resides in the broader systems of society and nature.

Therefore every action taken here will inevitably have a direct or indirect impact on the systems it belongs to.

While industrial development has allowed society to progress providing great improvements that make our lives longer and more comfortable, this development has not always been carried out with the necessary, respect and understanding and planning to ensure responsible and sustainable development. As a consequence, this behaviour eventually led to the abuse of natural and social capital4 for the benefit of financial capital, damaging cultural as well as biological diversity (Senge et al. 2001, 24).

After the Industrial Revolution, between 1820–1998, the world economy grew 50-fold, (i.e., 9-fold per person), as did income and life standard.

Many theorists have noted that this increase in global Gross Domestic Product (GDP) coincides with the emergence of the modern world capitalist system. This increase reflects a market that coordinates itself; resource production, price, and allocation of resources are mainly controlled by supply, demand and competition (DeLong 1998 and Lucas 2008).

Proponents of the current system state that increasing GDP (per capita) is shown to bring about improved standards of living, such as better availability of food. Based on this notion growth can be seen as the driver of progress in almost every aspect, leading to a global economic system in which progress is coupled with constant growth (Nardinelli 2008).

Despite its advantages this system is not without its flaws: missing is a robust legal framework to prevent irresponsible and unethical behaviour.

This high level of freedom and competition without the necessary regulations may lead to some undesirable situations, causing this system to

4 Social Capital: Trust, norms and networks which improve societal efficiency through enhancement of coordinated operations (Putman 1993)

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fail in some aspects that we are now forced to deal with e.g. poverty and degradation of nature (North 1990), as we describe below.

As discussed in section 1.1, as the economy grows, so does the demand for resources. A major environmental challenge is created here due to the scientific evidence of the finite amount of resources and the fragility of the ecosystem that we depend on for survival. Evidence of this, is that approximately 60 % of the world´s ecosystems have already been degraded (Jackson 2009, Foreword).

Aside from environmental issues there is also the matter of social unsustainability which manifests itself as poverty and unequal distribution of wealth and development in the world. While in the emerging countries there is an urgent need for development and improvement of quality of life with two billion people living on less than two dollars per day;

consumerism is rising and threatening the status of people´s well being in rich countries. As well, inequality in the OECD nations is higher now than 20 years ago (Jackson 2009, Foreword).

Another consequence of the need of financial growth is transnational agribusiness and banks causing inflation of food prices; fortunes are earned while more than one billion people are starving (Ecoportal 2011). Inflation together with low incomes means that in the emerging countries 60%-80%

of income is spent in food, while when compared to the developed countries this amounts to only 10% - 20%.

The modern era5 is also the era of Globalization. Regional economies, societies, and cultures have become integrated into a global network through communication, transportation, and trade. This enables foreign investments, capital flows and the spread of technology and knowledge (Bhagwati 2004). Globalization allows that buy-and-sell decisions can be executed by agents foreign over the people and ecosystems whose futures they are trading with. They exploit resources where it is cheap to buy and produce, stopping people from benefiting from their local wealth in order to maximize sales on the other side of the world at a low price; a price which competes in the demanding market (Senge 2001, 25).

5Modern Era: Historical period of time after the close of the Middle Ages. The beginning of the Modern Era started approximately in the 16th century (Dunan 1964).

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All the above are signs and evidence that this growth-based economical system has not been able to secure people´s stability, or to respect environmental preservation. Both are required to ensure living conditions on the planet and human dignity.

Though GDP is the indicator of our progress and success, it is merely the symptom. Where does our strive for economic progress stem from? Mainly our wish to improve our standard of living, prosperity is what we want.

Yes, prosperity encompasses wealth, but it goes beyond that. It includes others factors which are independent of wealth to varying degrees, such as happiness and health. These mainly come from the quality of our relationships, trust and participation in our communities, satisfaction at work and at pride of our values and purposes (Jackson 2009, Foreword).

Then, why is GDP used as a tool to measure progress when it does not include factors described above and in fact goes counter to them? For example, longer hours of work might result in an increase in certain measures of economic prosperity, but at the expense of driving people away from other preferences such as shorter work hours (Cowling 2006, 372).

Data from social surveys show that an increase in income does not result in a lasting increase in happiness (Easterlin 2003, 11180).

―Prosperity consists in our ability to flourish as human beings- within the ecological limits of a finite planet. The challenge for our society is to create the conditions under which this is possible. It is the most urgent task of our times‖ (Jackson 2009, foreword).

We are now in an unbalanced and dangerous situation which calls for a redesign of our values and priorities, measure systems of success..

Prosperity which is based on exploitation of ecosystems and constant social injustice, cannot lead to a stable and functioning civilized society. We need to shift to a new shared concept of prosperity; a concept based on fairness and happiness within the limits of a finite world. There is a need to substitute the short, individualistic and fragmented thinking for a long term systems thinking one, which is able to ensure lasting prosperity (Jackson 2009, foreword).

With the information above, we can realize how businesses have a major role in today's society and in facing the sustainability challenge (WBCSD 2010, 2-3). With no global governing body making decisions to move society towards sustainability, actual organizations need to move society in

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the sustainable direction; such are businesses (Robert Horn 2010).

Businesses have already realized the importance of the sustainability challenge and the role they have to play in moving society towards a more sustainable world. This can be seen as in the last 10 years, climate change, fuel security, preservation of biodiversity and global equality have become the Monday morning of the international policy makers agenda (Jackson 2009, 6).

1.4 The World Business Council for Sustainable Development and Vision 2050

―Our mission is to provide business leadership as a catalyst for change toward sustainable development, and to support the business license to operate, innovate and grow in a world increasingly shaped by sustainable development issues‖ (WBCSD 2011).

As a response to business´ belief that business as usual is no longer an option and that they needed to develop ‗a business view of the role businesses in making the world sustainable‘, Vision 2050: The new agenda for business (Vision 2050) was developed and released by the World Business Council for Sustainable Development (WBCSD) at the World CEO Forum in February 2010.

1.4.1 The World Business Council for Sustainable Development The WBCSD is a CEO-led (Chief Executive Officer), global association which provides a platform for companies to explore sustainable development, share knowledge, experience and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations‖

(WBCSD 2011b).

Back in 1990, the Swiss industrialist, Stephan Schmidheiny realized the world was in need of a major change. He believed that ‗business could act as a catalyst for change toward the achievement of sustainable development‘. The opportunity for Mr.Schmidheiny to find the actors to bring his vision about came when he was invited to coordinate the business participation and voice at the 1992 Rio Earth Summit and so the WBCSD was founded. The Council merged in 1995 with the World Industry Council on the Environment and opened its secretariat in Geneva (Switzerland).

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Bjorn Stigson has presided over the organization since 1995, which now counts a staff of about 50 professionals. WBCSD membership is acquired by invitation of the Executive Committee to companies which are committed to sustainable development. Members support the council by sharing their knowledge and experience, as well as human resources (WBCSD 2011b).

The council boasts 200 members from over 25 countries and 20 major industrial sector as well as over 55 national and regional partner organizations sectors. It is fulfilling its mission as its members engage in sustainable development practices, such as the integration of corporate social responsibility and reporting standards like the Global Reporting Initiative6 (WBCSD 2011b).

Along with holding a space where business can come to explore sustainable development and share best practices it is also a place where tools are developed to offer support for its members in the implementation of sustainable development into business strategy and operations. For example their Corporate Ecosystem Services Review7 which helps companies to address a connection they often fail to make – the one between the health of ecosystems and the business bottom line (WBCSD 2011c).

1.4.2 Vision 2050

All WBCSD members were invited to participate in the creation of a project with the intention of addressing the question ―what will the world look like in 2050?”, and29 CEOs of member companies answered the call (WBCSD 2011a).

These 29 author members represent multinational companies representing 14 countries and 14 industries including the mining, energy, chemical, consumer goods, agriculture and automotive industry to name a few. With the help of representatives from business and civil society along with regional partners and experts, they wrote the Vision 2050 report which is a

6 Global Reporting Initiative: Sustainability reporting framework used by global business, civil society, labour, academic and professional institutions (GRI 2007).

7 Corporate Ecosystem Services Review: This tool helps managers proactively develop strategies to manage business risks and opportunities arising from their company‘s dependence and impact on ecosystems (WBCSD 2011c).

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call for business to align their strategies, operations and goals towards the Vision: ―9 billion people living well, within the resource limits of the planet by 2050‖ (WBCSD 2010, About Vision 2050).

The Vision 2050 report is set in a futuristic tone, describing what a sustainable world could look like. It lays down a pathway divided into two timeframes: the Turbulent Teens, from 2010 to 2020, and Transformation Time, from 2020 to 2050. The Turbulent Teens represent the ‗formative decade‘ that will bring people and ideas together. The Transformation Time will build upon the knowledge, behaviour change and innovative solutions that were arrived to during the Turbulent Teens and is expected to be a time of growing the consensus around sustainable development issues i.e.

fundamental change in markets (WBCSD 2010, 10).

The pathway is grouped into 9 elements: Values, Human Development, Economy, Agriculture, Forests, Energy and Power, Buildings, Mobility and Materials. Each element includes key deliverables that must be achieved by 2020 i.e. commitment to true value pricing and close looped design, as well as measures of success for 2050 i.e. Cost of carbon, water and other ecosystem services internalized.

1.4.3 Implementing Vision 2050

Despite the clear signals in the pathways, Vision 2050´s authors caution that it is not a blueprint, but a platform for dialogue. As the report states the biggest question that business and other organizations such as governments or civil institutions are facing is ―How do we get there?‖.

1.5 Research

In our research we set to integrate a SSD approach into the WBCSD's Vision 2050 report. While the report provides a vivid description of "what"

the world should and could look like by the year 2050, we wanted to contribute to "how" we can get to such desired future according to SSD. To do so we used the FSSD as a tool.

1.5.1 Conceptual Framework

The Vision 2050 report‘s main target audience is business but it acknowledges that the way for it to be accomplished depends on the

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interconnectivity between all different parts of society i.e government.

Considering the wide scope that Vision 2050 addresses, it is a complex system.

The FSSD is a tool designed for planning towards full sustainability in complex systems within the constraints of the four sustainability principles.

For this reason the FSSD is used in as the conceptual framework to both structure our approach and inform the answer to this research.

Using the FSSD as a guiding line throughout the research allowed us not only to understand and evaluate the Vision 2050 report in a thorough and structured way, but also to design a strategic way to execute it.

The five phases of the research co-relate to the five levels of the FSSD, in the following way:

System level – Phase I. Getting familiarize with the system boundaries as defined by the Vision 2050 report, and how is it placed within society and within the biosphere.

Success level – Phases I and II. Defining success according to Vision 2050 and the four Sustainability Principles (4 SPs).

Strategic level – Phase III. Planning the strategy to backcast from success.

Actions level – Phase III and IV. Identifying strategic actions.

Tools level – Phases III, IV and V. Developing and refining an implementation plan for Vision 2050.

1.5.2 Research Purpose

Our research aims to analyze how companies can use an SSD approach when moving toward the achievement of Vision 2050 goals.

Our research focuses on business as they are our most competent force to foster a sustainable society. As mentioned before, there is no other group of with a better position, freedom and power to influence as business are.

The outcome of this research analysis is to develop an implementation guide, informed by the FSSD and our research results, in an effort to help companies move Vision 2050 forward in a strategic manner with the ultimate goal of creating a sustainable society. The implementation guide is a practical step by step guide for business executives to integrate an SSD approach to Vision 2050 within their organization. The driver behind this

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guide is that plans which are structured and simplified are more likely to get done and implemented, as our preliminary research revealed. Therefore the intent behind the guide us to make Vision 2050 a more applicable resource.

Vision 2050 was chosen because of its potential as a vehicle for achieving sustainability. Created by 29 multinational leader companies, it already demonstrates the need for sustainable development. A more impactful result can be achieved by working with those that are already aware and eager to face the sustainability challenge than with others. In addition, we assume that due to the magnitude and reputation of the companies behind Vision 2050 report i.e. authors include Fortune 5008 and Dow Jones Sustainability Index9 companies; it is one that other companies would be more willing to trust and learn about.

1.5.3 Scope and Limitations

Our work will focus on helping to build the foundation of the report. In addition, we have chosen to focus on companies who participated in the creation of Vision 2050, or other WBCSD member companies which are familiar with the report all multinational leading business from different industry sectors. To ensure a holistic approach and for validation, our research was also informed by sustainability experts, external to business, to gain further understanding of the possibilities that lie ahead in

implementing Vision 2050 towards the goal of sustainable society.

1.6 Research Questions Main question

How can multinational for-profit companies implement a Strategic Sustainable Development (SSD) approach to integrate Vision 2050´s goals into their strategic plans and operations?

8 Fortune 500 is a list compiled annually by the Fortune magazine which ranks according public corporations in the Unites States according to their gross revenue (USPAGES 2011).

9Dow Jones sustainability indexes are global tracking indicators that provide benchmarking information which are used by asset managers to create sustainability portfolios of leading sustainability driven companies. It is created through collaboration with SAM, an investment group which focuses exclusively on sustainability investing (DJSI 2011).

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1. What does the Framework for Strategic Sustainable Development (FSSD) reveal about Vision 2050´s approach in moving towards sustainability?

2. What are the barriers and enablers multinational for-profit companies face in executing Vision 2050 when moving towards sustainability?

3. How can a Strategic Sustainable Development (SSD) approach be used to develop an implementation guide to complement vision 2050?

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2 Methods

In this section we lay out the overarching design of the research, its difference phases and the methods. This includes lists and descriptions of the research participants and the process of collecting and analyzing the data which was gathered through these interactions.

2.1 Research Design

The Interactive Model for qualitative research design which was developed by Joseph Maxwell was the overarching approach for constructing the research plan. Maxwell's interactive model served as the template for defining the research components and how they integrate, while still maintaining a flexible platform which allows constantly questioning and revising the process (Figure 2.1). When following a linear research plan one must initially design the research, then proceed step-by-step, with very limited options to adapt if necessary. However, the interactive model enables flexibility and supports continuous reflection between the different phases of a research, meaning there is a reciprocal impact of the phases on one another throughout the process (Maxwell 2005).

Figure 2.1. The interactive model for qualitative research (Maxwell 2005, 5)

The trans-disciplinary nature of this research required a wide range of methods for data collection and from a variety of resources, as described in section 2.2. By allowing data to flow in and be reassessed the interactive model leaves room for questioning the process and modify if necessary.

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2.2 Research Methods

In our research we set to explore the WBCSD's Vision 2050 report, the pathway it describes and the platform it creates for initiating a dialogue around the role business have in moving society towards a sustainable world. For this purpose a five-phase research plan was created (Figure 2.2).

Figure 2.2. Research plan: Phases and Methods.

2.2.1 Phase I: FSSD analysis

The main goal of the first phase was to answer our first secondary research question: What does the FSSD reveal about Vision 2050´s approach in moving towards sustainability? To explore this, the concept of triangulation was applied by integrating data collected through several approaches.

Document content analysis. The main document of our research focus, the Vision 2050 report, was evaluated to cultivate a greater understanding of its definitions for concepts such as sustainability and success. The FSSD was the main tool for the content analysis of the report, to evaluate the report's correlation to the five different levels and to explore if and how they are reflected in its different parts.

A specific set of questions was used to provide a general guide the FSSD analysis by creating a common understanding and language around the main topics, these are presented in Appendix A. This allowed to analyze the independently by each of the three researchers, following the guiding questions, and was then integrated to one document.

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Further documents were analyzed mostly documents written by the WBCSD or its member companies about Vision 2050 and its implementation. Through this analysis key players and potential contacts were identified.

Documents were collected from several websites, among them the WBCSD website and related companies. The focus was on the companies' Sustainability section including; sustainability reports and articles, Corporate Responsibility Reports, on-line publications and business articles. Further data was found through the search engine Google, by using the search-words 'Vision 2050 WBCSD'. This analysis was guided by data from the report; however the researchers' own knowledge and intuition played an essential part in sorting out the data which was found.

Exploratory interviews. Interviews were carried out with experts from different backgrounds (table 2.1.), who are familiar to some degree with Vision 2050, the FSSD or both; however, they did not participate in creating the report. The interviews focused on the challenges we might encounter when approaching for-profit companies and what role can the report play in the engagement of companies.

Three of these individuals continued to later phases of the research and comprise our FSSD panel. All these individuals are familiar with the FSSD, and have used it in the past in the context of working with multinational companies. Their perspective helped to ensure that an SSD approach will be properly included in the Implementation Guide.

Table 2.1. Exploratory interviews.

Experts Position / Title

Simon Goldsmith MSLS alumni, director at Principled Sustainability Göran Carstedt Chairman of TNS International

Karl-Henrik Robèrt Founder of the TNS FSSD panel

Bob Willard Speaker and author of resources for sustainability champions

Sarah Brooks MSLS alumni, Principal Advisor & Senior Manager, Sustainable Business. The Natural Step Canada

Geneva Claesson MSLS alumni, Manager, Enterprise Risk Services. Deloitte Canada

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To answer the second secondary research question: What are the barriers and enablers multinational for-profit companies face in executing Vision 2050 when moving towards sustainability? The target audiences for the data collection varied and included among others; the twenty-nine companies which co-created the report and members of the project's core team, WBCSD staff, WBCSD Future Leaders Team10 participants, non- profit sectors and academia. In total around seventy introductory emails were sent to potential participants, describing the research and the level of commitment which is expected; thirty replied back and twenty-five confirmed participation in the research.

Introductory calls were conducted with those who expressed interest to participate, all were recorded and transcribed. The data harvesting from the calls focused on the background of the Vision 2050 project, its current state and identifying preliminary answers for the survey's questions.

Pilot surveys. Pilot surveys were sent out a week before the launching date.

The test respondents were our primary and secondary advisors, our classmates and the FSSD panel members.

Given the variation in the participants, surveys were tailored to allow different data to be collected. Participants were familiar with either the FSSD and Vision 2050 or both; created or are using the Vision 2050 report;

and experienced in working with implementation guides, including individuals from Professional Services Firms.

Surveys were distributed through email and participants were allowed up to two weeks to respond. In total 21 surveys were sent out, 13 replies were collected via email, and 8 in semi-structured interviews by phone. Four participants did not answer a survey; rather answers were pulled from their introductory calls. A complete list of all participants, including their positions and countries can be found in Appendix B.

10 The Future Leaders Team is a WBCSD program that provides twenty young high potential employees from within WBCSD‘s membership with the opportunity to gain knowledge about sustainable development and network with others. The team runs for up to one year and every year the team has a different focus. In 2010 the focus was the Vision 2050 report (WBCSD 2011e).

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